In a piece in National Review this week, Johan Norberg and Christian Sandström wrote how several European nations are concerned about the European Union’s plan to omit green investments from its spending rules. This would be taking place six years into the EU’s Green Deal, the authors wrote, and the “combination of environmental legislation and green subsidies has been detrimental for the continent’s already struggling economy.”
“This is Europe’s man-on-the-moon moment,” European Commission President Ursula von der Leyen declared at the launch of the EU’s Green Deal in 2020. Today, that moonshot looks less like Apollo 11 and more like the Soviet N1 rocket: grand ambitions and vast resources, but no successful launch.
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The Green Deal promised technological leadership, strategic autonomy, and industrial revival. Increasingly, however, it has delivered deindustrialization, fiscal burdens, and failed prestige projects.
Electrification — the central promise of Europe’s green transition — is barely advancing. European electricity production has declined over the past decade. In Germany, electricity generation has fallen sharply since 2014 as industrial activity weakens and energy-intensive sectors contract.
Last year Spain suffered one of the worst blackouts in modern European history after years of rapid expansion in intermittent power generation. Meanwhile, the hydrogen boom championed by European policymakers has largely collapsed. Former EU climate commissioner Frans Timmermans once called hydrogen the “rock star” of the green transition. But last year, almost 60 major hydrogen projects worldwide were canceled or delayed despite massive subsidies and political support from Brussels.
Europe’s battery ambitions have fared little better. Northvolt, the Swedish battery champion that secured billions in subsidies and green loans, was intended to be Europe’s answer to Chinese dominance. Instead, its collapse became one of the largest bankruptcies in modern Swedish history.
The fundamental problem behind the EU’s green-energy experimentation is an intellectual one. Policymakers embraced the idea that governments should behave like venture capitalists — taking bold risks, directing capital, and actively shaping markets. In theory, this sounds dynamic and visionary; that’s one reason why industrial policy ideas are resurgent in the United States, on both the progressive left and the MAGA right. But if Europe’s experience tells us anything, it’s that such policies carry a long and disappointing track record.
Read the full piece in National Review.
